Dealing with the purchase box: does Amazon prefer itself?

Status: 5/26/2022 15:21

Antitrust authorities have been investigating for years whether Amazon is abusing its market power and favoring its market. More or less he collected only researched data on this issue.

Jörg Hommer and Julian Gräfe, SWR

Easy and convenient shopping – Amazon is one of the winners of the corona crisis. In just over 25 years, Amazon founder Jeff Bezos has created one of the largest corporations in the world. His promise: Customers come first. Advertising promises low prices on Amazon. Exclusive research by ARD’s business editors More or less however, they show that the customer is not actually shown the lowest price for each product.

Amazon: a monopoly in online commerce?

Julian Gräfe and Jörg Hommer, SWR, Plusminus, May 25, 2022.

Competition to buy a box

The subject of research is the questionable practice of awarding the so-called buy box. Every Amazon customer knows this: This is the area on the product detail page of the Amazon Marketplace around the cart box. Online retailers all over the world are competing for this special offer. Only one seller receives the purchase field, even if the product is offered by several sellers. Products without a purchase box have little chance of sale as they are difficult for customers to find.

According to Amazon, in addition to the lowest price, BuyBox is awarded based on speed of delivery, customer ratings and delivery reliability. However, sellers in the marketplace are increasingly competing with Amazon itself, and products that are doing well are also of interest to Amazon’s own business. But do the same rules of the game apply to the internet giant? As More or less only found out, some dealers now doubt it.

Is the really cheapest offer always displayed in the Amazon purchase box?

Image: SWR

The lowest price is not always displayed

Exclusively for More or less a price analysis company examined a purchase box of more than 64,000 products. It took into account the criteria of price and speed of delivery. Each product was offered by a variety of vendors as well as Amazon itself. A sample sample shows that Amazon alone has a BuyBox for approximately 20,000 products. At a good 8,000, Amazon has a BuyBox, although there are other sellers who offer the product at a lower price; Amazon was on average € 1.83 more expensive for these offers. And for 156 products, Amazon even had BuyBox, although there was a cheaper supplier that could deliver as fast as Amazon.

Internet saleswoman Lena Kreuzkamp is also feeling the strength of Amazon in the German market. The jeweler has been selling branded jewelry on Amazon for over ten years. Amazon has now become a direct competitor to over half of its branded jewelry, as well as offering the products itself. While it’s always cheaper than Amazon, there’s still no box for its products.

Amazon denies its own preferences

At Plusminus’ request, Amazon denies any preference for its own offers. Should a BuyBox award be awarded, the same customer-relevant criteria would apply to everyone – including Amazon – “(…) but not only low price (including shipping costs), fast delivery, clearly good customer service and reliability in maintenance delivery promise According to Amazon Corporate Communications, Amazon is silent on other criteria.

The fact is: Amazon has a dual role, it is both the platform operator and the retailer. Is Amazon using this dual role to its advantage? And to the detriment of dealers and even customers? The European Commission and the Federal Antimonopoly Office have been researching this group for years. Allegation: Abuse of market power through ever-increasing wealth of data.

What does the Digital Markets Act bring in?

In an exclusive interview, EU Competition Commissioner Margrethe Vestager made the following statement: More or less Firm: “If there is a self-preference, it must end at the latest when the Digital Markets Act enters into force,” Vestager said. “One of our cases is that Amazon is also a seller, and we definitely have that connection.” And if the illegal behavior continues, a fine will be imposed, according to the Competition Commissioner.

The Act on digital markets is one of the most important legislative projects of the European Commission and aims to regulate a new, safe framework for competition in digital markets. However, it will not enter into force until the end of 2022 and will probably not fully enter into force until 2024. For antitrust expert Thomas Höppner, Amazon’s behavior is a scandal: “We simply cannot accept that private companies ultimately decide how does competition work, which demand is served by which supplier ”.

The e-commerce market share further increased in 2021.

These interactions between product range and customer reach are the driving force that has driven Amazon for years. In 2021, Amazon’s share of online commerce in Germany alone had risen to 55 percent. Zalando, Otto, Kaufland and the company together reach just ten percent. Thousands of online stores account for the remaining 35 percent of German e-commerce.

For a good year, the Federal Antimonopoly Bureau has been investigating whether Amazon is subject to the revised Anti-Competition Act, which has only been in force since 2021, due to its unique intermarket position. If the result had been the same, Amazon would have been placed under closer scrutiny by the authorities and could be fined more quickly. Sellers and customers pay the price for Amazon’s market power. Because it’s about nothing but the future of fair online trading.

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